At a glance
| Owner | Liability | Central registration fee | Our fee |
|---|---|---|---|
| 1 person, using own PAN | Unlimited, personal | None; each registration has its own fee | From ₹1,499 |
What is a sole proprietorship?
A sole proprietorship is the simplest business form in India: one person owns the business, keeps all the profit and carries all the risk. The business is not a separate legal person. It uses the owner's PAN, and its income is the owner's income.
That makes it cheap and quick to start, with no MCA filing, DSC, DIN or partnership deed. The trade-off is unlimited liability: if the business cannot pay its debts, creditors can go after your personal assets. It also cannot bring in a co-owner or an equity investor without changing structure.
A proprietorship suits freelancers, consultants, traders, shops and small service businesses testing an idea. If you want limited liability as a solo founder, compare a One Person Company.
How to register a sole proprietorship
You register a proprietorship by choosing a trade name and taking the registrations your activity requires. The usual order is:
- Decide the trade name and activity. The trade name appears on your registrations and invoices; it is not reserved the way a company name is. To protect it, consider trademark registration.
- Check your PAN and Aadhaar. The proprietorship uses your personal PAN, which must be linked to Aadhaar.
- Take the tax registration. GST registration if you cross the threshold or fall in a compulsory category.
- Take the MSME registration. Udyam registration is free and helps with MSME benefits.
- Take the local registrations. Shop and Establishment registration under your state's law and a trade licence from your municipal body, where they apply.
- Add activity licences. FSSAI for food, IEC for imports or exports, and professional tax in states that levy it.
- Open a current account in the trade name using two of these registrations as proof of business.
Which registrations does your proprietorship need?
It depends on what you sell, where, and how much. This table is the starting point we use.
| Registration | Who needs it | Government fee |
|---|---|---|
| GST | Turnover above ₹40 lakh (goods) or ₹20 lakh (services), lower in special category states; or a compulsory case such as inter-state supply of goods | No government fee |
| Udyam | Any micro, small or medium enterprise that wants MSME status | Free |
| Shop and Establishment | Shops, offices and commercial establishments, under the state's Act | Set by the state |
| Trade licence | Trades listed by the municipal body, such as Kolkata's Certificate of Enlistment | Set by the municipal body |
| FSSAI | Any food business | Set by FSSAI by licence type |
| IEC | Anyone importing or exporting goods or services | ₹500 |
| Professional tax | Proprietors in states that levy it, such as West Bengal, Maharashtra and Karnataka | Set by the state, within ₹2,500 a year |
| TAN | If you must deduct TDS | ₹65 plus GST |
GST registration
GST registration is required once aggregate turnover crosses ₹40 lakh for goods or ₹20 lakh for services (₹20 lakh and ₹10 lakh in special category states), and from day one in compulsory cases such as inter-state supply of goods or selling goods through e-commerce platforms. You apply within 30 days of becoming liable. You can also register voluntarily, which many B2B suppliers do to give customers input tax credit. The GSTIN is built on your PAN. There is no government fee.
Udyam registration
Udyam registration on udyamregistration.gov.in is free, online and based on self-declaration. It records the business as a micro, small or medium enterprise, which supports delayed-payment protection under the MSMED Act, 2006 and access to MSME schemes. Beware of lookalike websites that charge for it.
Shop and Establishment registration
Most states require shops, offices and commercial establishments to register under their Shops and Establishments Act. Rules differ:
- West Bengal: registration is required; renewal is free and deemed, under a 2019 notification.
- Maharashtra: an establishment with fewer than 10 workers files a one-time, free intimation in Form F within 60 days of starting; larger establishments register.
- Delhi and Karnataka: registration is online on the state labour portal.
Fees, where charged, are set by the state and usually depend on the number of employees. We quote them for your state.
Trade licence
A trade licence is a municipal permission to carry on a listed trade at a particular premises. In Kolkata it is the Kolkata Municipal Corporation's Certificate of Enlistment; in Delhi, the MCD health trade licence covers listed trades such as eating houses, storage and manufacturing. Fees depend on the trade category and premises, are fixed by each municipal body, and are revised by them. We check whether your activity needs one.
Other licences: FSSAI, IEC, professional tax
- FSSAI: every food business needs FSSAI registration or a licence; see FSSAI registration.
- IEC: needed to import or export; the DGFT fee is ₹500; see IEC registration.
- Professional tax: West Bengal, Maharashtra and Karnataka levy it; Delhi does not. The constitutional cap is ₹2,500 per person a year; see PT return.
Documents you need
Proprietor
- PAN card (linked to Aadhaar)
- Aadhaar, with the mobile number linked for OTP
- Recent photograph
- Bank statement or cancelled cheque
Place of business
- Electricity bill or property tax receipt not older than two months
- Rent agreement, if rented, and a no-objection certificate from the owner
Business details
- Trade name and a short description of the activity
- Any activity licences you already hold (FSSAI, drug licence, IEC)
Opening a current account in the business name
Banks follow the RBI's KYC rules for proprietary concerns. Besides the proprietor's own KYC, a bank asks for any two documents proving the business exists in your name, such as:
- a registration certificate issued by a government authority
- a Shop and Establishment certificate or licence from the municipal authority
- a GST certificate
- an IEC
- a complete income-tax return in the proprietor's name that reflects the business income
- utility bills in the name of the business
Where two documents are not available, a bank may accept one after verifying the business at its address. This is why GST and a Shop and Establishment certificate, or a trade licence, are usually taken first.
What our ₹1,499 package includes
Our professional fee for setting up a sole proprietorship starts at ₹1,499 plus GST.
Included
- A registration plan for your activity and state: which registrations you need now and which later
- GST registration application (REG-01) and replies to officer queries
- Udyam registration
- Shop and Establishment application, where your state requires it
- A current account document kit for your bank
Not included, quoted separately if you want them
- State and municipal fees (next section)
- Trade licence, FSSAI, IEC, professional tax and TAN applications
- GST returns, accounting and your income-tax return
Sole proprietorship registration cost
There is no fee to "register a proprietorship" as such. Your cost is our fee plus the government fees for the registrations you take.
| Fee | Amount |
|---|---|
| Professional fee (Regikart) | From ₹1,499 |
| GST registration | No government fee |
| Udyam registration | Free |
| Shop and Establishment registration | Set by the state; quoted before filing |
| Trade licence | Set by the municipal body; quoted before filing |
| IEC | ₹500 |
| TAN, if needed | ₹65 plus GST |
Professional fees exclude GST at 18%. Government fees, where they apply, are paid at actuals to the department and are shown separately. Fees verified on 22 September 2026.
How a sole proprietor is taxed
A proprietor pays income tax at personal slab rates on the business profit, together with any other income. Which Act applies depends on the year.
FY 2025-26 under the Income-tax Act, 1961
For FY 2025-26 (AY 2026-27), the new tax regime is the default:
| Total income | Tax rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 to ₹8,00,000 | 5% |
| ₹8,00,001 to ₹12,00,000 | 10% |
| ₹12,00,001 to ₹16,00,000 | 15% |
| ₹16,00,001 to ₹20,00,000 | 20% |
| ₹20,00,001 to ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
A resident individual with total income up to ₹12 lakh gets a rebate of up to ₹60,000 under section 87A, so no tax is payable at that level (the rebate does not cover income taxed at special rates, such as certain capital gains). Health and education cess of 4% applies on the tax. A proprietor with business income can choose the old regime by filing Form 10-IEA by the return due date.
Presumptive tax: sections 44AD and 44ADA
Presumptive tax lets you declare profit at a fixed rate and skip detailed books.
| Scheme | Who | Turnover limit | Profit to declare |
|---|---|---|---|
| Section 44AD | Resident individuals in business (not professions, commission, brokerage or agency) | ₹2 crore; ₹3 crore if cash receipts are within 5% | 8% of turnover, or 6% of receipts through banking or digital channels |
| Section 44ADA | Resident professionals in the professions listed in section 44AA(1), such as legal, medical, engineering, architecture, accountancy and technical consultancy | ₹50 lakh; ₹75 lakh if cash receipts are within 5% | 50% of gross receipts |
Under presumptive tax, the whole advance tax can be paid in one instalment by 15 March. If you leave section 44AD, you cannot return to it for five years. See ITR for business for the full rules.
Tax Year 2026-27 onwards
From 1 April 2026, income is taxed under the Income-tax Act, 2025, which uses "tax year" in place of "previous year". We confirm the slabs and presumptive rules for your return for Tax Year 2026-27 when we prepare it.
Compliance after setup
A proprietorship has no ROC or MCA filings. Its yearly work is tax, GST and the renewals of local licences.
| Compliance | When |
|---|---|
| Income-tax return (ITR-3, or ITR-4 under presumptive tax) for FY 2025-26 | 31 August 2026 for non-audit business cases; 31 October 2026 with a tax audit; belated return up to 31 December 2026 |
| Tax audit | When turnover exceeds ₹1 crore (₹10 crore if cash receipts and payments are each within 5%), professional receipts exceed ₹50 lakh, or presumptive conditions require it |
| Advance tax | 15 June, 15 September, 15 December and 15 March where tax is ₹10,000 or more; one instalment by 15 March under presumptive tax |
| GST returns | GSTR-1 and GSTR-3B monthly, or quarterly under QRMP for turnover up to ₹5 crore; see GST filing |
| TDS returns | Quarterly, if you deduct TDS |
| Shop and Establishment, trade licence | Renewal as each state or municipal body requires |
Our sole proprietorship compliance service covers the year.
Proprietorship vs OPC vs LLP
A proprietorship is the cheapest to run; an OPC gives one founder limited liability; an LLP gives two or more partners limited liability.
| Point | Sole proprietorship | One Person Company | LLP |
|---|---|---|---|
| Owners | 1 | 1 member, with a nominee | 2 or more partners |
| Separate legal entity | No | Yes | Yes |
| Liability | Unlimited, personal | Limited to shares | Limited to agreed contribution |
| Registration | Through business registrations (GST, Udyam, local licences) | MCA, through SPICe+ | MCA, through FiLLiP |
| Annual MCA filings | None | AOC-4 and MGT-7A | Form 11 and Form 8 |
| Audit | Tax audit only above Income-tax thresholds | Statutory audit every year | Above ₹40 lakh turnover or ₹25 lakh contribution |
| Tax (FY 2025-26) | Personal slab rates | Company rates (22% option or 25%/30%) | 30% plus cess; surcharge above ₹1 crore |
| Presumptive tax | Available | Not available | Not available |
| Who can own it | Any individual | Only an Indian citizen, resident or NRI | Individuals and bodies corporate |
See OPC registration or LLP registration to compare in detail.
When to move beyond a proprietorship
Consider a company or LLP when:
- a co-founder or investor wants to own part of the business
- contracts or borrowings put your personal assets at real risk
- large customers or tenders ask for an incorporated supplier
- profits reach a level where company tax rates work out lower than your slab rate
A proprietorship cannot be converted by a single filing; the business is transferred to a new company or LLP. We can plan that move when you are ready; see private limited company registration.
Why proprietors choose Regikart
Regikart is a CA and CS firm with 250+ clients. We set up proprietorships and then handle their GST, accounts and returns.
- Only what you need. A registration plan by activity and state, not a fixed bundle.
- Tax from day one. Advice on presumptive tax, the old or new regime and GST before you register.
- Written quotes. Professional fee from ₹1,499, state and municipal fees quoted before filing.
- Offices in Kolkata (Head Office), Delhi and Bengaluru, with documents shared over WhatsApp and email.
Call or WhatsApp +91 70444 94804, or email [email protected].